The Favorite: Real Quiet won the Kentucky Derby as a minor long shot and in the Preakness Stakes was the second choice. In both races, he defeated an up-and-coming colt with a big closing kick, Victory Gallop. The Spoiler: Victory Gallop, after a pair of runner-up efforts, was poised to turn the tables on his rival.
Both hedge funds and private equity funds appeal to high net worth individuals (many require minimum investments of $250,000 or more), traditionally are structured as limited partnerships and involve paying the managing partners basic management fees plus a percentage of profits.
How a Private Equity Firm Works. A private equity firm is called a general partner (GP) and its investors that commit capital are called limited partners (LPs). Limited partners generally consist of pension funds, institutional accounts and wealthy individuals. The general partner invests the fundâs committed capital in public and private companies, manages the portfolio of investments and seeks to exit the investments in the future for sizable returns.